French minister denies nationalisations on the way

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Last Updated: Tue, Nov 27, 2012 17:40 hrs

By Jean-Baptiste Vey

PARIS (Reuters) - French finance minister Pierre Moscovici denied on Tuesday that the government was contemplating mass nationalisations of its troubled industries, seeking to reassure investors after another minister told steel magnate Lakshmi Mittal on Monday that his company was no longer welcome in France.

Moscovici said after meeting U.S. and British investors that the Socialist government did not plan to nationalise any large firms permanently, despite a proposal to temporarily take over an ArcelorMittal steelmaking site in northeast France to save two blast furnaces from closure.

"This is not about returning to an older way of thinking, carrying out massive, general, permanent nationalisations," Moscovici told reporters after a meeting that included delegates from Blackrock , JP Morgan and Morgan Stanley .

"What is under consideration is a temporary mechanism," he said in reference to the ArcelorMittal site at Florange.

His comments came a day after Industry Minister Arnaud Montebourg told a newspaper in an interview: "We no longer want Mittal in France because they haven't respected France.

Last week Montebourg, one of the most left-wing ministers in the government, had already said the state could temporarily nationalise the company's Florange site while the government tries to find a buyer.

President Francois Hollande is due to meet Mittal at his Elysee Palace presidential office later on Tuesday in an attempt to mend ties with the billionaire, whose firm employs some 20,000 people across in France across over 100 sites.

Hollande's government has been locked for months in a dispute with ArcelorMittal over the fate of two blast furnaces at Florange, which Mittal says he will close down if no buyer is willing to take them over by December 1.

Montebourg has accused Mittal of breaking a 2006 commitment to keep the blast furnaces running and not considering offers from potential buyers to take over the site.

Sources close to Mittal say that no commitment to keep the blast furnaces running was ever made and that the firm is seeking to sell only the blast furnaces, not the whole site.

Talks between Hollande and Mittal at 1645 GMT were expected to focus on a solution to save some 600 jobs at the Florange site, which has been taken to symbolise France's alleged industrial decline.